“Building a Business” Three Powerful Words – They’re More than Just Semantics

In a previous newsletter I mentioned reading an interview by Adam Bryant with Penny Pritzker, the United States Secretary of Commerce, in the December 22, 2013 Business Section of the New York Times. It was not a long interview but it was filled with comments that resonated with me. One of those comments was her focus on “building the business”.

“I grew up in a household that revered building businesses. It wasn’t thinking about leadership; it was more about building something. To build something you ultimately have to lead.”

I have never heard it quite put this way, but this comment reframed the values I grew up with. I come from an entertainment family and making movies, producing plays, and creating TV shows is what was valued. It was understood that the process was really difficult, that many people had to be brought together to make it happen, and more often than not, it might not succeed. But if it doesn’t “you pick yourself up, dust yourself off, and start all over again”.

No one ever spoke of engagement, mission statements, team building, leadership, or company values. The lexicon of modern management was alien to our discourse. Everyone knew that you were “only as good as your last picture” and getting your next picture made depended on everyone working to make the current picture the best they could; great movies sometimes don’t do well at the box office. But a bad picture that fails at the box office can be a career killer. A movie is a single product company and they take almost as long to make, from conception to theatrical release, as it takes to get a business off the ground and successful. In the next paragraph Commerce Secretary Pritzker reflected on lessons she learned from her father.

“One thing he would talk about is how, when you’re building a fast-growing business, the bellman might very shortly be the general manager. He was focused on talent, and that you need to realize that talent doesn’t necessarily come in at the top, and it’s maybe somebody you grow. He has a real appreciation for the person who is passionate, committed, energetic, and wants to learn, as opposed to the person who’s already done everything you need them to do.”

It is amazing what children can learn from their parents. So let me tell you a short story about my Father.

Some years back, my father was releasing a picture called Raising Victor Vargas, about some young Latino kids growing up in New York. There was an opening at Lincoln Center and I invited a client and his wife to join us. My client ran organizational development for the international businesses of a US based, Fortune 500, Food and Consumer Products Company. His life was focused on finding and developing talent, building quality management teams that could take the company forward, and employee retention and engagement, in addition to a, myriad of other issues.

After the opening, we went to dinner with my Father and Step-Mother. Once seated and having reviewed all the many reasons why we liked the movie, my Father asked my client what he did and who he worked for. My client briefly explained and then asked my Father about his own company. My Father responded in a very self-deprecating way saying:

“Oh well, I have a little film distribution company, it’s very small, not like the huge operation you work for. We’re very tiny company, nothing much to explain.”

At this my Step-Mother and I looked at each other and then I turned to my client and told him that many people running studios or independent movie companies got their start working for my Father. My Step Mother then ticked off a list of people and the movie companies they now run. My Father shot back:

“That’s not true, the guy that runs Paramount Studios, never worked for me.”

“Excuse me” I replied turning to my client. “My Father is right. My Brother John never worked for my Father.”

This brought a burst of laughter, and protests from my Father. Then my client turned to him and with a serious and deeply interested tone, and asked:

“How do you do that? How do you develop people like that? It’s what I spend most of my time on and it’s really hard to do.”
“No its not” my Father replied. “It is really simple.

“Ok,” my client said, “so what is your secret?”

“There is no secret”, my Father said. “All I do is hire young people who are passionate about being in the movie business and making movies. I look for kids with lots of energy, who want to learn as much as they can, and are committed to making whatever they work on a success. I pay them very little; I give them too much responsibility and not enough authority and turn them loose. They go charging forward and I spend most of my time telling them no. Sooner or later they hit a wall and crash, and I pick them up, dust them off, and yell at them to get back to work.”

My client sat listening with his eyes wide and his mouth open.

My Father continued. “You see, I hate managing people. If I want to get something done I find someone bright and ambitious who is dying to do it. It is much easier to hold on to the reins than it is to push on a string.”

My client sat back in his chair as the klieg light went off over his head. Euphonies are wonderful like that. After a pause, and a long sip from his drink, he asked:

“How do you hold on to the people you develop?”

“I don’t!” said my Father. “After working for me for a few years, they have more experience than most senior guys at big studios. So, the big movie studios and film companies hire them away, for a lot more money than I could every pay, to take a job that gives them a big title but less responsibility than they have working for me.”

My client sat in stunned wonder at what he had heard. My Father hires people to work at “building a business”.

Think about the phrase “building a business”. If I walked over to you and said that I needed your thoughts about a business I am going to build, would I get your attention? If you liked the description of the business and thought it sounded fun, would you get excited? Think about it. If someone came in and said, “Hey, we have these properties and we should develop them, maybe put some hotels on them, what do you think?” Would you have some thoughts? Or perhaps if I said, “Some guy sent us this script, read it, tell me what it’s about and if it would make a good movie.” How fast would you read it?

The phrase “building a business” is not just semantics. Those three words synthesize why you should come back to work tomorrow, what you should think about, the opportunities to be captured, and the challenges to be resolved. Those three words ring with adventure and excitement; and discount none of the obstacles and risks.

Next time you want to hire someone or get your people moving, try beginning the conversation with “Look, we have this business we want to build…” You may be surprised by what happens; who knows it may be a hit!

]]>http://quorumassociates.com/thoughtleadership/building-a-business/feed0The Hardest Part of Hiring the People you Need – The Beginning is the Key to Successhttp://quorumassociates.com/thoughtleadership/the-hardest-part-of-hiring-the-people-you-need
http://quorumassociates.com/thoughtleadership/the-hardest-part-of-hiring-the-people-you-need#respondMon, 20 Jan 2014 20:02:58 +0000http://quorumassociates.com/thoughtleadership/?p=230This article is written by Francis Goldwyn, Managing Director, Quorum Associates LLC
A few years ago I was invited to a luncheon where I had the [...]

This article is written by Francis Goldwyn, Managing Director, Quorum Associates LLC

A few years ago I was invited to a luncheon where I had the rare honor and pleasure to sit next to Peter Lewis, the founder, Chairman and CEO of Progressive Insurance who passed away in November of 2013. Peter was an engaging individual and while we chatted about various topics. At one point he asked what I did and then posed the following question:

“What is the hardest part of Executive Search?”

Our conversation paused for a moment while I regarded the twinkle in his eye.

“Peter, you may not believe this, but the hardest part of what I do is getting the client to be very clear and very specific about the position they are hiring and why the position is important to their company.”

Peter smiled in agreement and asked:

“The position description, getting that document right is the hardest part, right?”

“Yes Peter” I replied. “Getting that right is probably the hardest part of any assignment, not just for me, but often for clients as well.”

“You know” he said as his tone became more serious, “I learned that lesson early in my career and ever since I always write them myself. Sometimes I think I know what I want and why I am hiring the position, but when I start to write that document I often find that I am really not so sure and it helps me think it through so I get it right.”

As clients, candidates, and just about anyone who asks know, I can get on quite a soap box about this topic. In all the years I have worked with clients, I can attribute the majority of the success for any assignment to the hiring manager being willing to engage with me on the contents of a Position Document and remaining engaged until they are confident the document is correct, clear and reflects the strategic and tactical needs of the business.

So it was with some delight and surprise that I came across an interview by Adam Bryant in his Corner Office column with Penny Pritzker, the United States Secretary of Commerce, in the December 22, 2013 Business Section of the New York Times. It was not a long interview but it was filled with comments that resonated with me. At the bottom of the first column of the layout, Mr. Bryant asked Secretary Pritzker “What were some early leadership lessons?”
The Secretary replied:

“I learned to do a lot more work on the front end about hiring – to force yourself to really understand what you’re looking for and do more research. I’m also a big believer in triangulation. When I’m interviewing someone, I also want the opinion of others – people who share the same values as me but who might look at the situation a little differently.”

My reaction to the interview was sufficiently acute that my dog and the small puppy, who had recently become a member of the household, both moved away from where I was sitting.

While Secretary Pritzker phrased the idea differently, she was echoing the view Peter Lewis expressed at lunch and that I preach to anyone who will listen. Hiring good people is dependent upon being really clear about why you are hiring the position and the value the position brings to your company. Every executive who wrestles with these ideas finds the task difficult. So here are some broad questions to help focus the effort.

Can you describe how the direction of the company is changing and some of the challenges and opportunities those changes will create?

Are the challenges and opportunities strategic (longer term) or tactical (immediate) in nature? If they are both, then what delineates the strategic from the tactical?

How does this position specifically address those challenges and opportunities?

Can you describe this position in a way that would articulate, in some detail, what this position will do over the next two years, why doing those things are important and how well this fit with the answers to the questions above?

Is there any specific experience, skills, knowledge, or ability, that will critical to addressing the challenges and achieving the opportunities?

Can you connect specific experience, skills, knowledge, or ability to specific challenges or opportunities?

Can you provide a list of specific concrete accomplishments that would objectively indicate the challenges are effectively addressed and opportunities are proactively captured?

Thinking about people who have recently joined the company over the last few years, describe those who have been successful and what it is about them that contributes to that success. Describe those who have not been successful and why.

Someone reading this list may mistake the general nature of the questions as inviting general or broad answers. A good check on the answers is to get feedback from some other source. If the answers are well thought out and clear, then the feedback should express a detailed understanding of the position and its contribution to the company.

Time is scarce for any executive. Yes, it talks time to think through a position and be clear and specific about what kind of person you need in that role. But if the position is important to the company and its success, then time spent on clearly and specifically defining the position is the first and most important step in finding the person you need.

]]>http://quorumassociates.com/thoughtleadership/the-hardest-part-of-hiring-the-people-you-need/feed0Is It Hard to Find and Hire Qualified People for Positions You Need to Fill? – Stop Recruiting and Start Building a Talent Pipelinehttp://quorumassociates.com/thoughtleadership/stop-recruiting-and-start-building-a-talent-pipeline
http://quorumassociates.com/thoughtleadership/stop-recruiting-and-start-building-a-talent-pipeline#respondTue, 15 Nov 2011 19:33:34 +0000http://quorumassociates.com/thoughtleadership/?p=217This article is written by Francis Goldwyn, Managing Director, Quorum Associates LLC
In a survey of Human Resource Professionals conducted by Quorum Associates and Research in [...]

This article is written by Francis Goldwyn, Managing Director, Quorum Associates LLC

In a survey of Human Resource Professionals conducted by Quorum Associates and Research in Motion, 92% of respondents said finding qualified candidates was “extremely difficult”. An Opinion piece in the Wall Street Journal dated June 13th 2011 by Jeff Imeltt and Ken Chenault stated:

“There are more than two million open jobs in the U.S., in part because employers can’t find workers with the advanced manufacturing skills they need. The private sector must quickly form partnerships with community colleges, vocational schools and others to match career training with real-world hiring needs.

On October, 13th of this year, Jonathan Vizcarra writing for the web site Technocrati, arrived at similar conclusions. Mr. Vizcarra wrote:

“Siemens Corp in the US has over 3,000 jobs open all over the country. Caterpillar and Motorola at any given time has 200 job openings. Some companies report job vacancies from a low of 6 to a high of 200. Some of these positions are left unfilled for at least nine months. Average starting salary? US$89,000 a year. What’s wrong with this picture? “

Vizcarra goes on to say:

“The problem is that there are few qualified people applying for the jobs. Companies are having difficulty finding applicants with the correct job skills. There are fewer American students taking math and science courses than before. Students in Math, engineering, technology and computer science accounted for 11.1% of graduates in 1980. That share dropped to 8.9% in 2009. In this situation, unemployment is a structural problem. Workers lack the skills needed to fill the jobs. US graduates do not have the correct skill set to start with.

This brings to mind a definition of insanity: insanity is doing the same thing over and over again, and expecting a different result each time. Typically, a company posts a brief job description on its web site, various job boards, and social networking sites; then wades through a mass of resumes and cover letters. The company has no control over who sees the ad. The company has no idea if the people they want to hire have looked at the opportunity. Every time there is a position to be filled, the above is repeated, often with less than mediocre results. I call this process “transactional hiring”.

Part of the reason that companies hire this way is because historically, companies have been able to find enough people, with enough of the skills and experience the company needs, to get by. But that is no longer the case. Prospective employees have been able to find work based on a static set of skills and experience. This too is no longer the case.

If you think of a company as a pond and its people as water, then on one side you have a stream of fresh water flowing in filling the pond, and on the other side a stream of water flowing out. What is important here is the concept of flow; people come and people go, like water moving through a pond. So the question becomes how to keep the pond full with good quality water.

Like water flowing through a pipe, employers may want to set up a talent pipeline. A talent pipeline is a regular flow of potential employees who have the skills, education and experience the company needs. A successful talent pipeline is a positive, affirming, and encouraging process that tries to identify individuals with the drive and motivation to update their skills and maintain their professional competence over time.

To find and attract the people you want, you must first be very clear about who you are, why you are hiring, what are the requirements of the position and skills necessary for success. You must also be explicit about how success in any position will be objectively measured. The next step is to design, develop, and implement a process that produces a flow of individuals who “ultimately” have the skills and abilities needed to succeed. I use the word “ultimately” because at first many candidates may not meet the requirements.

If specific knowledge and or skills are necessary, tell the candidates that they will be tested on these skills or knowledge as part of qualifying for the position. If it turns out that they lack certain skills, share with them local resources where they can get the skills. Make it clear that if they have the drive and motivation to develop and acquire the necessary abilities, they are welcome to come back and reapply for the position.

A properly developed talent pipeline relies on and leverages training resources that are available in the local community. These include local community colleges, and vocational schools. All these resources are eager to engage with local businesses and provide them with individuals who meet their needs. There are also online resources available which Candidates can use to update their skills in math and science. One such example is KahnAcademy(www.kahnacademy.org). Another great resource is www.greatcourses.com. To be clear, this is not a cost to the employer, but to the candidate. When individuals come back, let them reapply, be encouraging. If they meet the requirements, they will have demonstrated one more important quality, a drive and motivation to work for your company.

Companies that are successful in hiring and retaining good people, invest in those people, through good times and bad. The best way to ensure you have the skilled employees you need is to retain the skilled employees you have. A properly developed talent pipeline helps identify key skills and uses talented existing employees to help develop those skills in existing as well as new employees.

Increasingly clients have come to Quorum for help addressing issues around recruiting, talent development, and employee retention. Consequently, Quorum now has a menu of services it can offer clients to help them change how they go about defining what they really need, develop processes to find and identify individuals who meet those needs, guide them through the development of a talent pipeline, then identify and help develop follow on programs that enhances the value of each employee.

Please give us a call if you would like to talk about the above. We are here to help.

This article is written by Francis Goldwyn, Managing Director, Quorum Associates LLC

Signs of economic recovery seem to be sprouting. Companies wishing to reinforce or grow their business must make smart and strategic hiring decisions today, in order to better position their companies to compete tomorrow. This is not an easy task. When Quorum surveyed Human Resource managers regarding the difficulty they have hiring quality executive talent, 92% said it was very difficult. So what must hiring managers do to make sure they are hiring quality talent? There are three critical components to consider, and a few traps to avoid.

The three critical components include: being very clear about why the position is important, and what it contributes to the future success of the company; direct involvement of the hiring manager, including leading the hiring process and being intimately involved throughout that process; and open and honest communication about the expectations and the challenges of the position among everyone involved in the process, especially the candidates.

Talented managers and executives have no interest in moving from a position where they are successful to one where continued success might be at risk. So why do talented executives change companies? In our experience, the single largest factor in an executive’s decision to make a change from one company to another is what we call the “challenge/opportunity”. Just as risk is associated with return, challenge is the flip side of opportunity. Over the last twelve years, the single most important factor affecting a candidate’s decision to accept an offer from a client has been the significance of the challenges and the associated scale and scope of the opportunity.

Talented managers and executives are the kind of people who look for challenges to overcome and problems to be solved, and tend to have a deep desire to make an impact. To attract these executives, hiring managers need to begin by clearly explaining why the position exists within the company, as well as the positions’ significance to the future success of that company. This responsibility falls squarely on the shoulders of hiring managers and executives. Human Resource partners can help frame this understanding, but they are not a substitute for the involvement of the hiring executive or manager. This leads to the second component of hiring quality talent.

To hire quality talent, the hiring manager must lead the process and be intimately involved throughout. Hiring direct reports is one of the most important responsibilities of executive management. However, once a decision to hire a position is made, hiring executives frequently turn the process over to human resources; effectively withdrawing from the process. It is common to hear HR professionals express frustration about the lack of involvement by their internal clients in the hiring process. It is just as common to hear line managers express frustration with the HR function for a lack of motivation, limited understanding, and mediocre results. HR professionals strive to provide quality service to their internal clients. That service can only be as good as the hiring executive’s leadership of and involvement in the hiring process itself.

The candidate experience is directly influenced by the level of executive involvement in the hiring process. During the interview process, candidates frequently comment on receiving radically different explanations regarding the reasons, responsibilities, and requirements of a particular role. When hiring executives are intimately involved in the process, the reasons for the position are more likely to be clearly and consistently understood and communicated by everyone with whom the candidate comes in contact. Problems, contradictions, and inconsistencies must be identified and resolved quickly, making it clear to the candidate that the company speaks with one voice and everyone is in agreement about the importance of the position being hired. Most significantly, everyone the candidate meets during the interviewing process can discuss the position from their individual perspective. This is a clear signal to the candidate that the executive leading the process has taken the time to involve all interested parties and help them develop an understanding of how the position affects them.

The third critical component to hiring quality talent is communication. The hiring manager is the only individual who can make sure that everyone in the process is empowered to communicate clearly, openly, and honestly with the candidates. All candidates bring to the process an external view of the company and its challenges. Candidates often ask simple, direct questions about the company and its business, and get vague, evasive answers or worse yet, no answers at all. Opaque responses, evasiveness, or avoidance of the issues will leave the candidate with the impression that the problems are much worse than generally understood. Open and direct discussion of the challenges and issues helps to promote a better sense of the candidates’ ability to address these critical needs. It also allows the candidate to formulate a deeper and fuller understanding of the challenges to be faced and evaluate the opportunities created by resolving those challenges. Most importantly, it conveys the company’s desire and commitment to resolve the issues.

The hiring manager is also the only individual who can make sure that their HR partner has the information and background necessary to answer important questions from search consultants and candidates. It is the individual leading the process who sets and communicates the standards for the quality of talent to be hired. It is the hiring managers’ responsibility to communicate this to everyone involved in the process, including the candidates.

There are a few traps hiring executives must try to avoid. The first trap is one of misunderstanding. The hiring executive must make sure that everyone involved with the hiring process, especially those developing and communicating with potential candidates, clearly understands what the hiring manager wants and why the manager wants it. To avoid the trap of misunderstanding, those involved in the process must be able to explain back to the manager his/her expectations in a way that confirms their clear understanding. The second trap to be avoided is the scarcity of time. All successful executives and managers have excessive demands on their time. As those demands change day by day, there is a pernicious tendency to delegate away tasks that can be “managed” by others, especially those softer, more indirect tasks that seem less directly associated with the “business.” Hiring executives need to remember that hiring their direct reports and the quality of those hires is one of their most significant responsibilities, and that precious time must be dedicated to that responsibility. The final trap involves compromise. Given that the position has real value to the future of the business then compromising on the quality of the candidate is not an option. If the hiring executive finds they are drifting towards compromise in an effort to fill a position, then the process must stop and one or more of the issues discussed above should be reviewed and corrected before continuing. Compromise on talent is like compromise on product quality; eventually you pay a price.

The war for talent is going to escalate. No computer, machine, or other asset has ever created a new product, opened a new market, solved an important customer problem, or started a new business. Leadership, innovation, and creativity fall exclusively in the human domain. This is why talented people are important; and why they are difficult to find and hire.

]]>http://quorumassociates.com/thoughtleadership/how-to-hire-great-talent-2/feed0Back of the Envelope – Social Security and Illegal Immigrationhttp://quorumassociates.com/thoughtleadership/back-of-the-envelope-%e2%80%93-social-security-and-illegal-immigration
http://quorumassociates.com/thoughtleadership/back-of-the-envelope-%e2%80%93-social-security-and-illegal-immigration#respondWed, 01 Dec 2010 15:28:31 +0000http://quorumassociates.com/thoughtleadership/?p=197Back of the Envelope thoughts on what can be done about the cost and solvency of Social Security, Medicare and Medicaid. These three programs represent approximately 65% of all federal expenditures; and approximately 16% of GDP. The Congressional Budget office estimates that the trust funds for Social Security, Medicare and Medicaid, are underfunded by approximately 0 .6% of GDP, or $87 billion. Clearly, without meaningful action, these programs are at risk.

The demographic trends in the United States and Europe indicate that the population is aging and that there are declining numbers of younger people entering the workforce. In the United States, this macro trend is creating tensions between immigration as a source of much needed younger employees and social programs, such as Social Security, Medicare, and Medicaid, designed to care for the elderly. I have already written about the value of older, more experienced employees in the article “Walking out the Door”. Thinking about immigration and Social Security, I have taken a “Back of the Envelope” approach to explore a conceivable solution to what seems to be two unsolvable problems.

Back of the Envelope – Social Security and Illegal Immigration

Everyone is concerned about the cost and solvency of Social Security, Medicare and Medicaid. These three programs represent approximately 65% of all federal expenditures; and approximately 16% of GDP. The Congressional Budget office estimates that the trust funds for Social Security, Medicare and Medicaid, are underfunded by approximately 0 .6% of GDP, or $87 billion. Clearly, without meaningful action, these programs are at risk.

Homeland security estimates that there are approximately 11.5 million illegal immigrants living in the United States and approximately 500,000 new illegal immigrants enter the country each year. Many of these illegal immigrants have paid tens of thousands of dollars in fees and bribes to smugglers and officials to come to America. However, once here, The Department of Homeland Security indicates few illegal immigrants are involved with serious crime. It is also noteworthy that a recent study by Professor Robert Fairlie, of the University of California at Santa Cruz, and the Kaufman Foundation for Entrepreneurship has indicated that, in 2009, for every 100,000 adults in the United States, approximately 310 started new businesses.

The study also indicates that for every 100,000 adult immigrants, of all ethnicities, living in the United States, 510 started new businesses. Further, for every 100,000 adult Latinos living in the United States, approximately 460 started new businesses. For hard political reasons, Congress needs to find a way to solve the funding problem for Social Security, Medicaid and Medicare. As an equally hard practical reality, people want to immigrate to America, illegally if necessary, in order to build a better future for themselves and their families. So, the question is: could changing national immigration policy solve the Social Security funding problem?

The Back of the Envelope

What if each illegal immigrants currently living in the US, could obtain a visa at a cost of $15,000, providing the right to work in the United States and, under certain conditions, become US citizens? In addition, what if all people wishing to legally come to the United States and work could get the same visa for $10,000 with the right, under certain conditions, to become American citizens? Lastly, assume that all the money generated by the visa fees, would be exclusively used to fund the Trust Funds for Social Security, Medicare and Medicaid.

The conditions of the visas might be as follows. All immigrants would be required to have a US citizen or business as a guarantor. Until they become full naturalized US citizen, no immigrant would be entitled to any benefits granted US Citizens, by the United States Government. Upon receiving a visa, they would be issued a Social Security number and required to file Federal and State Tax returns; evidence of all three would be required for naturalization as an American Citizen. In the event the immigrantviolates any of these conditions, they would be subject to immediate deportation, their guarantor would be unconditionally liable for any amounts due the Government, and the immigrant forfeits any funds they have paid or that have been paid on their behalf.

If the 11.5 million illegal immigrants, currently living in the US, accepted this deal, that would generate approximately $172 billion for the Trust Funds. If the 500,000 illegal immigrants, who come to the US each year also accepted this deal, then that would provide an additional $5 billion annually to the trust funds. In addition, these now legal immigrants are likely to start almost 45,000 new businesses; wow!

]]>http://quorumassociates.com/thoughtleadership/back-of-the-envelope-%e2%80%93-social-security-and-illegal-immigration/feed0Thoughts about the Gulf and Executive Recruitinghttp://quorumassociates.com/thoughtleadership/gulf-executive-recruiting
http://quorumassociates.com/thoughtleadership/gulf-executive-recruiting#respondMon, 12 Jul 2010 14:00:40 +0000http://quorumassociates.com/thoughtleadership/?p=180The anger and frustration about the BP oil spill is a relentless torrent of finger pointing and recrimination. Oil executives, electioneering politicians, local business people, and environmentalists all have a view about why and how it happened. Rather than join the chorus, perhaps taking a step back and a looking at some broader principals might be of value. Here are a few thoughts I have about the disaster in the Gulf.

]]>The anger and frustration about the BP oil spill is a relentless torrent of finger pointing and recrimination. Oil executives, electioneering politicians, local business people, and environmentalists all have a view about why and how it happened. Rather than join the chorus, perhaps taking a step back and a looking at some broader principals might be of value. Here are a few thoughts I have about the disaster in the Gulf.

Just because you could do something does not always mean you should

Sounds pretty simple, but lately people and companies have been doing things because they could do them, not because they should do them. It reminds me of a recent conversation with a candidate about a position they were considering. The conversation did not focus on if the candidate could accept the position, but whether the candidate should accept the position. Although the individual was very excited about the role and the client wanted to hire him, accepting the position entailed significant changes for the candidate both professionally and personally. It was not clear if the candidate should take the position. By focusing on the “should” the candidate had to address the complex issue of long- term personal and professional fit between himself and the client.

Human Resource professionals often say that the “holistic fit” between company and candidate is a major factor in long term success. Just because you could do something does not mean you should. There is an important corollary to this idea.

Sometimes you should do something, even if you are not sure you could do something.

This is kind of like getting blowout prevention technology developed, proven and in place, before applying for a permit to drill. Similarly, in executive search, it is crucial to exhibit patience and discipline in order to ensure both you and your client are clear about the strategic goals and objectives of the position before moving forward with a search. Either way a lot of problems can be avoided.

The Black Swan always gets his man

In a nod to Nassim Taleb, it is not the probability of an event that defines the issue, but the severity of the consequences. There are approximately 3,600 operating oil platforms in the Gulf today, none of which have had an accident. Yet it took just one platform to cause a catastrophe. If the consequences of being understaffed in critical functions are sufficiently severe, it is important to get the right people hired now. No good CEO will accept a “systemic” failure because a manager thought the probability of a problem was too remote, almost zero, to warrant the costs associated with hiring. As Mr. Taleb says; “the Black Swan always gets his man.”

If you want to capture and enjoy the reward, be sure you can cover all the costs

The oil business is incredibly profitable, and deservedly so. While oil companies should be allowed to profit from their activities, they should also bear the full costs of doing so. Similarly, when a company wants to hire an individual to help build their business, market segment, or customer base, they want “only the best”, someone who will “beat their objectives” and “drive the business forward”. Although our job as recruiters is to deliver candidates who can clearly deliver on the objectives and bring real value to the company, we often hear “They’re great, but isn’t there someone cheaper?” You cannot drill for oil on the cheap, and, unfortunately, you can’t hire great talent on the cheap, either.

Systems, processes, procedures and controls are all very important, but they do not take the place of good judgment

This is a paraphrase of a comment by the CFO of a global financial institution. He is right. While there were countless systems, processes, procedures and controls on the Horizon platform, failure was a result of the compounding effects of multiple smaller failures to exercise good judgment. No amount of research, fact checking, reference checks, and multiple candidate interviews can take the place of fundamental judgment about either an individual’s or a company’s ethics, character and capabilities. Following processes, procedures, and controls, can never excuse ignoring the voice that says “this does not feel right”, “something’s wrong.” That little voice is good judgment speaking.

When I point my accusing finger at you, there are three more on my hand pointing back at me

Blame fixes nothing and rarely makes you feel better. What blame tries to do is move responsibility, but at best it can only temporarily shift responsibility. Over time, responsibility is efficiently allocated. When looking at the recent events in the Gulf, the financial crisis, Bernie Madoff, or Enron, there are more than enough people, companies, governmental agencies, and regulators, who failed to exercise their responsibility.

So, when something goes wrong, it is generally better to begin with; “I made a mistake, I will do my best to fix it.” Since I cannot fix a mistake I do not know about, I often ask clients and candidates to tell me when something is wrong. This allows the problem to get addressed and removes blame from the interaction. It is amazing how constructive people can be when they know blame is not part of the conversation.

Now what?

Over the last few years, we have had the rare opportunity to watch the world we know fracture and transform before our eyes. Much of this was because people and companies did things they could. They used a broad range of arguments to convince themselves and others that the risks were small and manageable, without knowing the full extent of the consequences if they were wrong.

Once things began to go wrong, they could not cover the costs of the consequences of their actions. When the systems, procedures, processes and controls failed, it became clear that judgment had been on a holiday for a long time. All that left was finger pointing and laying blame.

Now the time has come to pick up the pieces and start building again. To do this, we need people; good people, people who solve problems, people who build, people with experience, people with judgment, people with humility and empathy for others. These people are hard to find. But they are out there.

]]>http://quorumassociates.com/thoughtleadership/gulf-executive-recruiting/feed0What Is Recruitment?http://quorumassociates.com/thoughtleadership/what-is-recruitment
http://quorumassociates.com/thoughtleadership/what-is-recruitment#respondThu, 08 Jul 2010 17:17:15 +0000http://quorumassociates.com/thoughtleadership/?p=187Recruitment is the process of identifying individuals who can bring value to your company and attracting them to join the company as an employee. Sounds simple, but the devil is in the details.

]]>Recruitment is the process of identifying individuals who can bring value to your company and attracting them to join the company as an employee. Sounds simple, but the devil is in the details. Let’s explore some of those details.

Recruitment is built on a Strong Foundation

Recruitment has a number of foundational components. Each building block is important and cannot be ignored without diminishing the intended results. The first building block of successful recruiting is to identify why your company is hiring. Although it might seem logical, vacancy is not the reason. Think honestly about the importance of this position to your company. You and your recruiter will need to articulate the goals and objectives necessary to the role to ensure growth and success of your company. Once this building block is clear, your recruiter can help you and your company find an individual who can meet your company’s needs.

The second foundation block is to hone in on what kind of individual are you looking for and why. The person you seek must fit within the existing culture of your company, even if that culture needs changing.

The third building block of recruiting is to articulate what the individual in the role will be expected to do. This requires a clear and specific description of the scope of the role, the responsibilities, and related authority.

After the third block of your foundation is set, it’s time to move to step four. You will want to be sure your potential hire has the background and skills required to succeed in the role. It is important to consider relevant and necessary education and work experience as well a related technical skills and ability.

The fifth building block is to craft a detailed list of the expected accomplishments of the individual in order to quantify success in the role. These accomplishments must be specific and concrete and measured in discrete time frames over a twelve to eighteen month period.

Once this many layered foundation is built, it’s finally time to determine how the position will be compensated in terms of salary, bonus, and other incentive compensation. If you decide to utilize industry compensation studies, be sure the data is relevant and comparable to your company.

Identifying Specific Individuals

Line managers should not want to interview numerous candidates. In fact, they should expect to interview no more than five individuals, all of whom will tightly fit the requirements of the role based on the foundational components.

A recruiter must look at both direct and indirect competitors and functions that are related to the role being recruited. Then the recruiter should identify individuals in those companies and functions who can act as sources. Sources are individuals who are likely to know of someone appropriate for the role being recruited. Relying on and seeking the knowledge and expertise of others is a sign of a skilled recruiter and paramount to identifying individuals who meet the requirements of the role and are clearly qualified for the job.

Bring Value to Your Company

As the recruiter speaks to potential candidates, they will gather quantifiable and anecdotal information about each individual. This information is important for assessing any candidates’ ability to bring value to the company. It allows the recruiter to ask questions that might not be otherwise asked when interviewing candidates. Further, when a candidate is mentioned by a number of sources, the recruiter has the ability to gather more detailed information about a candidate and why they might be particularly promising for the role.

Attracting Them to Join the Company

When the recruiter contacts promising candidates, it may be received with caution. In order to mitigate this, the recruiter must be able to discuss all the foundational blocks of the role and articulate the position’s importance within your company. Although compensation needs to be competitive, keep in mind that good people rarely change jobs for money. People change jobs for unique opportunity, and other personal and professional reasons. It is the job of the recruiter to learn and understand a candidate’s motivation for change and make it clear to you.

Once the recruiter makes contact with a candidate they begin marketing the company and the opportunity. Everything they say and do affects a candidate’s decision to remain in the recruiting process. Both recruiter and the company must remember that there are few secrets in any industry. If the candidate begins to feel that either the recruiter or the company is not being open and forthright, the process will end. Because of this, it is important to be honest about both the positive and negative aspects and of the position and the company.

The recruiter should prepare a report on each candidate in order to provide the full details of a candidate’s professional career and qualifications. It should also include the recruiter’s recommendation for the candidate, backed up with the reasons why they clearly and specifically meet the requirements of the position. With a sufficiently detailed report, you will not have to ask basic informational questions about the steps in a candidate’s career during the interview. A successful report does the background check for the company and allows them to focus on substantial issues about the role and how the candidate would address and manage those issues.

Interviewing Candidates

Candidate interviewing, by the company, must be done carefully and professionally. It is just as important that the company present well, as it is for the candidate. The candidate should know how many people they will interview with and what their involvement in the recruiting process will be. In addition, information must flow both ways. The company must answer any question the candidate has, regardless of how uncomfortable or vulnerable it makes them. Similarly, the company should expect the candidate to do the same.

Making an Offer

Making an offer is often the most delicate part of the process. If the company has a view about what the compensation will be, share that with the candidate up front and early in the recruiting process. If all the individuals identified back out of the process due to compensation, then something is wrong; and it is not with the candidates.

When making an offer, be clear, be specific, be complete, and be fast. Once the offer is on the table, give the candidate time to consider and ask any questions. Do not be surprised if they wish to meet with the hiring manager again.

Ensuring Success

Once an offer is accepted, present the candidate a plan for in-bounding or on-boarding them into the company. This plan should include who they need to meet, what they need to know, problems and issues they should be aware of, and an understanding of the dynamics of the team they are joining. Remember, most new hires fail in the first ninety days. Protect the investment your company has made by bringing new people in correctly.

When done properly, recruiting can be a powerful strategic tool. It can change a company and its culture. Successful recruitment is difficult, but when done well, it can be amazing.

]]>http://quorumassociates.com/thoughtleadership/what-is-recruitment/feed0A Method to the Madness – An Interview with Richard Edwards of HED Capital – Part 2http://quorumassociates.com/thoughtleadership/understanding-market-dynamics
http://quorumassociates.com/thoughtleadership/understanding-market-dynamics#respondSat, 15 Aug 2009 18:42:34 +0000http://quorumassociates.com/thoughtleadership/?p=31In Part 1 of our interview with Richard Edwards of HED Capital, Richard gave a summary of the theoretical basis for the work [...]

In Part 1 of our interview with Richard Edwards of HED Capital, Richard gave a summary of the theoretical basis for the work he does. There are a few comments that need to be made before we begin Part 2. Since mid-2007, Richard had been telling his readers that the bull market in equities would soon be over and that the fall would be steep and severe. In October of 2007, he warned his readers that the high point would be at any moment and then identified the absolute high of the Dow to within 24 hours. In July of 2008, Richard told his readers that the rise in oil prices was over, declines were imminent and in August 2008 he said the back of the oil market was broken. On March 9th this year, Richard advised buying stocks, adding two days later that a long-term bottom was being made. Stocks in most markets around the world did indeed make their post-crunch lows on either the 9th or 10th March. These are but a few of the prescient calls Richard has made over the years, based on the research work that he and his group have done over two decades.

In Part 2 of the interview, Richard will be sharing further details about the methodology and explaining some of the applications. Some of his comments will expand on the discussion in Part 1. Later in this interview, I will provide readers with the contents of Richard’s commentary as it was made at the time. Each will be dated so the forward predictions of subsequent market events can be verified. On that note, I would like to welcome Richard back.

This article is written by Francis Goldwyn, Managing Director, Quorum Associates LLC

Recently, a client asked me; “What is the single biggest competitive challenge Quorum Associates faces?” I thought for a moment and then answered, “It is the pervasive negative perception of executive search and the tarnished reputation of the executive search business.”

Candidates tell us they feel treated like commodities and traded for a fee. Line managers frequently comment that search firms rarely have real knowledge about their business, their industry and/or the commercial issues facing their industry or company. What’s more, the person who sells the assignment is often not the person who does the work. Line managers, HR professionals and candidates all perceive a general unwillingness by search consultants, including those from the big firms, to invest the time and energy necessary to really understand the client’s business. As a result, positions are not really as represented and candidates are not as expected. The relationship of trust between clients, candidates and recruiters is damaged.

The feelings of clients and candidates applies to all types of search firms, retained as well as contingent; and all sizes of firms, large brand names and small boutiques. Many of the metrics typically used to evaluate search firms have little bearing on the quality of future service provided. A long list of prior assignments is no guarantee of future performance. Standard selection processes such as beauty parades, preferred provider lists and placement history may be convenient and easy to use, but they are, at best, poor measures of future service quality or assignment success. What should line managers, their HR partners and candidates expect from executive search firms?

The only way to establish trust is for clients and candidates to experience a quality search process. And that requires time, energy and commitment on the part of everyone involved in the process. So how does one identify a quality search process?

A quality search process begins with knowledge about the client and a commitment to client service. This means line managers and HR professionals need to find executive recruiters willing to commit the time and intellectual capital to get to know and understand the client’s business and company. Specifically, they need to find search consultants who will do fresh research on the industry, the manager’s line of business and competitors.

HR professionals should remember that when a recruiter says, “I know the market,” he or she often means, “I know some people in your business.” It does not necessarily mean, “I know and understand your business and the challenges and issues you are facing.” Nor does it mean the consultants are willing and able to obtain the knowledge and understanding required to effectively complete an assignment.

A quality search process requires clarity about what the client really wants and why. In our experience, it takes a number of thoughtful and probing conversations to fully explore the scope of what a client wants from a particular role. This requires both time and effort on the part of the line manager, HR and the search consultant. This is not easy, but it is very important because, to get the search right, you have to get what the client really wants right.

The search consultants must be able to write a document which clearly articulates knowledge of the company, clarity about the position, understanding of the culture of the company and the specific performance expectations of the client. Putting the scope of the role down in writing, allows the line manager and the HR partner to be sure the search firm understands what is needed. It also allows everyone involved in the process to clarify any ambiguity, carefully consider exactly what they expect from a position, and resolve contradictions between the expectations for the role and the specific measures of success. A quality recruiter should be willing and able to do this before the search begins.

HR professionals will know this is done properly when the line manager, as well as everyone else involved in the hiring process, can read the final document and say, “This is exactly what we want and if you bring us someone who fits this document we will hire them.” Potential qualified candidates should react to the document by saying, “I know exactly what they want to do, why they want to do it, what it takes to do the job and how performance will be measured. This document is clear and specific.”

Most clients and candidates experience the process of executive search as bumpy and chaotic, which leaves everyone feeling uncomfortable. Many recruiters stumble from candidate to candidate, working their existing network of contacts or some internal database. When these efforts lead to dead ends, the search grinds to a halt. Both clients and candidates are left to question the value provided by the recruiter.

Quality search consultants understand that a strong search process has structure for the search firm and transparency for the client. It allows the client-both line manager and HR professional-to have timely input, provide valuable guidance, help steer and direct the search, and ensure a successful outcome. It requires a team effort. Any issue, confusion or misunderstanding must quickly surface and be resolved. Lack of commitment and engagement by the client is the best way to ensure poor search results. A well-defined process with clear benchmarks and deliverables at each critical step is the optimal way to keep an assignment on track towards success.

There is a point in a search process where focus shifts from the client to the candidate. Culture and chemistry are why a candidate succeeds in a given position. The candidate with the best cultural fit with the company and ease with the style of management will be most likely to succeed. It is always a mistake to place any candidate, who is not a good fit for the company, the manager and the role. And these concerns are just as important for any candidate.

When it comes to candidates, Quorum is in the business of dreams, aspirations and ambitions. If we can match these dimensions with the strategic and tactical objectives of a client, the results are always powerful. Consequently, our focus is on developing a holistic view of candidates, in terms of their lives, not just their professional interests. We also caution candidates, that if for any reason they hear a little voice telling them that something is not right, to tell us. The process stops until that voice is carefully heard.

Fees are probably the most volatile issue. The rage clients feel is profound. They become angry when they have paid an entire fee upfront only to have the search drag on for months with few quality candidates and sometimes no placement. Quality search consultants get paid as they perform. They believe clients should not pay full fees for assignments that are not completed. Honest and fair dealing is important for both the client and the search consultant.

On the other hand, when the circumstances of a position change, clients must be open with the search consultant and the candidates about the change and the reason for the change. Problems and issues with the role or the company need to be disclosed up front as the assignment begins, not once the candidate joins the firm. Many search consultants feel angry when clients and their HR professionals try to hire candidates presented behind the search firm’s back, attempt to renegotiate fees and/or reinterpret retainer agreements after candidates have been hired.

Quorum believes that clients should be charged for work performed based on agreed objectives and benchmarks. In return, clients and their HR partners have an obligation to work openly, honestly and diligently with their service provider to facilitate the completion of the assignment.

There are many good professional search firms dedicated to quality service and strong client relationships. Clients should be open with these firms, share issues and concerns, allow these firms to help them and, finally, let them demonstrate the level and quality of service they can provide. Quorum wants relationships with its clients. This means we will do what is right and best for our clients, and we hope and expect that our clients will do the same in return.

]]>http://quorumassociates.com/thoughtleadership/quality-executive-search/feed0Which Key Human Resource Function has the Greatest Influence on Management’s opinion of HR?http://quorumassociates.com/thoughtleadership/five-functions-of-a-quality-human-resource-department
http://quorumassociates.com/thoughtleadership/five-functions-of-a-quality-human-resource-department#respondFri, 01 May 2009 18:34:42 +0000http://quorumassociates.com/thoughtleadership/?p=20This article is written by Francis Goldwyn, Managing Director, Quorum Associates LLC
If one could list the five major functions of a quality HR department, [...]

This article is written by Francis Goldwyn, Managing Director, Quorum Associates LLC

If one could list the five major functions of a quality HR department, what would those five functions be and which of those have the greatest impact on management’s opinion of HR?

This question was asked in a number of human resource groups on the professional networking site Linked In. There were approximately 41 individuals who responded to the question and provided a broad range of thoughtful, intelligent answers. This article is a summary of the thoughts and comments provided by human resource professionals and consultants. The purpose is to make the information available to all and allow additional comment and debate.

“I don’t think it’s about which HR function has the greatest influence but rather which HR person. That person most assuredly will be the one who builds credibility as being a business person first and an HR professional second.”

In reviewing all of the comments and responses, a few general themes became clear. A major theme that seems to be important is the idea of human resources as a strategic, business-focused function. Many respondents used language that implied a strategic value to the functions and capabilities of HR. Clearly, respondents felt it was very important for HR to demonstrate commercial sense, knowledge of the business, the competitive landscape and a strategic understanding of how the business needs to develop.

“I think these are all great answers. But the one I have found to have the biggest impact of an HR professional on upper management is to have an understanding of the business. By truly understanding what the company does, who they are, what services they provide and where they want to go, upper management will be more likely to see HR as a business partner, and not an administrative function.”

Therefore, it is perhaps reasonable to assume that there are HR functions that are clearly focused on the commercial and strategic aspects of the business. Additionally, it might follow that most HR professionals would include those in one of the top five or six functions of a quality human resource department.

As a follow up to this, many people made comments about human resource functions and the importance of those functions connecting together in support of the business.

“We have to connect the delivery of our activities with their business impact. We’re delivering talent so that clients are served by smarter people. We’re delivering motivation so that we generate better solutions for customers. We deliver employee relations so that we retain a stable and knowledgeable workforce our customer’s value. We deliver all these things so that our company’s people create superior value for stockholders.”

These comments imply a relationship between the delivery of talent and the achievement of strategic objectives. This might mean that talent acquisition and recruitment would be very important.

“I would like to say that recruiting the right person for the right place, keeping in mind business requirements and retaining him as per organization requirement is so important that he or she should be kept by any mean, i.e. motivational or tools.”

This would also imply that talent management is very important.

“I really believe talent management will have the biggest impact on the perception of HR.”

Respondents also commented on the importance of being trusted by those managers they support. The issue of trust with respect to HR is one that Quorum has seen come up in a number of ways.

“HR is privy to information that is not to be shared. Managers need to know they can trust you. They also need to receive the customer service experience where they feel that you are there for them, that you are concerned with their efforts and that you are taking it seriously to partner with them to reach their goals.”

Yet the negative perception of human resources by management continued to surface and some comments seem to express a deeply felt frustration.

“Unfortunately HR is yet widely considered as a support function and not an initiative (innovative) one. And the fact of the matter is that when HR tries to be initiative (innovative), the management would shoo them off by saying, "You don’t understand the market. Please do what you are asked to." Unfortunately, this is the fact! But if we don’t understand the market, then how do we provide them the best of the available human resource to do the business?”

Summary of Respondent Ranking by Major Category

Given the breadth and range of responses, the individual functions that were listed by respondents, were organized in their order of importance. These were then grouped into nine major categories. Only those respondents who gave a list of important functions were included. Some respondents seemed to agree with a particular list, but did not provide their own. In this case, that particular list was not included twice.

As an example of how functions were categorized, functions like change/transformation management, leadership succession, organization design, organization development and succession planning were all grouped in the category organizational development. Functions like delivering HR information, HR metrics, HRIS (human resource information systems) and HR reports for decision making, were all put in the category of analytics.

Below is a table that summarizes the ranking of important functions by major category. The number of functions per category indicates how many functions were mentioned that were reasonably grouped in to a specific category. The percentage of mentions by respondents is a measure of how many respondents mentioned a function that applied to each specific category. For example, 78% of respondents mentioned a function that applied to the category of talent management.

The ranking of importance is based on the indicated importance. Larger percentages imply respondents seemed to place a greater importance on the functions in the category. A category with most functions ranked fourth or fifth, would imply a lower importance to respondents than a category with functions ranked consistently one or two.

Categories

Number of Functions per Category

% of Mentions by Respondents

Ranking of Importance

Talent Management

28

78%

46%

Employee Relations

10

28%

52%

Organizational Development

8

22%

50%

Talent Acquisition

7

19%

83%

Business Knowledge and Strategy

6

17%

72%

Compensation and Benefits

6

17%

47%

Information and Reporting

5

14%

53%

Other

5

14%

13%

Policy and Procedures

3

8%

44%

What struck Quorum as interesting was the contradiction between the percentage of individuals mentioning functions within categories and how they ranked the category in terms of importance. For example, the category of talent acquisition ranked 83% on importance (mostly first in importance) yet only 19% of respondent’s listed functions associated with this category. Alternatively, talent management ranked 46% on importance (mostly fourth and fifth in importance), yet a full 78% of respondents listed functions associated with talent management.

There may be a number of reasons for the seeming contradictions between which functions were listed and how they were ranked on importance. What is important is not the absolute numbers but the directional indication of the numbers. Business knowledge and strategy are very important to those who mentioned it; but not very many respondents mentioned it. The same is true of recruiting. Talent management was mentioned as a key function by a significant majority of respondents, but was noticeably lower in importance. The reasons for these answers needs further study.

COMMENTS AND CONCLUSION

This report is an attempt to share the comments and views of respondents to a question posed about key human resource functions and their influence on management’s views of HR. The liveliness of the debate and the range of comments indicate that there are a number of issues that need to be better understood.

As some readers may be aware, Quorum Associates is engaged in a study of human resource professionals. The purpose of the project is to develop a better understanding of the challenges and issues human resource professionals face in today’s environment. This project entails a series of short and simple digital surveys conducted by the independent national research firm Action Research Institute. A full and detailed analysis of the results of the first survey has been sent to participants and is available in PDF format to those who join and complete the study.

We have completed the first survey and a few of the results are relevant to this discussion.

In response to open-ended questions in the survey, many respondents indicated that how human resource executes its capabilities has a relationship to how human resource is viewed by management. Others indicated that effective HR capabilities begin with the support of senior management. A majority of respondents felt that issues of capabilities (talent management and talent acquisition) were most important, followed by the perception of the HR function as strategic. This seems to parallel many of the comments made by respondents in this case.

However, an important finding of the first survey is that the perception of the human resource function is independent of the perception of HR capabilities. Based on the answers of human resource professionals, who participated in the survey, there was little meaningful relationship between how the human resource function is perceived internally or externally and the perceived quality of processes to attract, hire and manage talent.

In addition, it was a basic assumption in the survey, that positively perceived talent management and talent acquisition processes would allow easier identification and recruitment of top talent. Regardless of how respondents viewed their talent management or their talent acquisition processes, the identification and recruitment of top talent is still a challenge. 93% of participants indicated that identifying and recruiting top talent is very difficult. Furthermore, this was true regardless of the internal or external perception of the HR function. Yet only 19% of respondents from Linked In mentioned functions associated with talent acquisition.

Lastly, 73% of our survey participants, ranked “the human resource function is perceived by the company as a strategic function and the professional within HR are viewed as proactive, helpful, constructive and engaged” as in the top two of importance. However, only 16% of respondents here listed functions associated with the category business knowledge and strategy.

The responses to the question at the beginning of this article are a helpful check on some of the assumptions Quorum is making in developing the surveys. Furthermore, we are trying to listen to some of the unspoken factors that influence the relationship between management and human resources.

We want to thank everyone for taking the time to share their thoughts, views and experience-and encourage continuation of this discussion. We invite all human resource professionals to participate in our study.